IT Architectural Alternatives

Information systems EnvironmentApplicationsStructure and ControlsArchitecture and Business information and Policies and Planning and Development standards communication models procedures control system MethodologiesUser InterfacesToolsGraphical desktop metaphor I/O devicesReporting Information Groupware Personal Expert system CAD Tools analysis productivity development tool CASEInformation management Communication managementComputers,printers, Operating systemDBMSDocument managementNetwork, routers, Network management systemGatewaysE-mail and file transfer servers

Components of an ICT-architectureValue Creating Business OpportunitiesCommerce Content CommunityValue Enabling ICT InfrastructureSolutions and services

SECURITY

AND

CONTROLERP (e.g. SAP, PeopleSoft)Supply chain managementInternet service providersSystem Integration servicesOutsourcing and hostingSoftware productivity and development toolsPackages (WP, Spreadsheets,e-mail, Programming languages( C++, visual basic, JAVA, Cobol, ) ComputingHardware (computers, printers, )Operating systemsBDMSsDocument management systems CommunicationsHardware (networks, routers, )Network operating systemsGatewaysE-mail and File transfer services

Value creation in a networked environmentBenefits from InvestmentsOrganizational benefitsImprove ability to share information, communicate, coordinate, and control activities inside the organizationMarket/Industry benefitsImprove ability to share information, communicate, coordinate, and control activities with customers, suppliers, and business partners

Category I: Platform improvements (NC)Category II: Options Value (Internet-based)Organizational benefitsIncrease functionality, flexibility, and useful life of the internal ICT-infrastructure Market/Industry benefitsIncrease functionality, flexibility, and useful life of the industry ICT-infrastructure

Sample metricsLower operating and maintenance costConsolidate data centersStreamline and simplify networks (single protocol)Decrease headcount for IT-professionalsImprove application development processRedude cost of IT-development projectsDecrease time needed to deploy IT-enabled business solutionsIncrease useful life of platformDecrease upgrade cost for new technologies (thin client)Enable flexibility (Lego approach)Increase range of options for new business solutionsIncrease number of value-creating business solutions (more vendors)Enable new business building opportunities

Value creation in a networked environmentBenefits from investmentsOrganizational benefitsImprove core operating activities inside the firm (procurement, sales, )Market/Industry benefitsImprove existing supply/ dis- tribution channels that link firm to customers, suppliers and partners or create new ones

Category III: CommerceCategory VI: ContentOrganizational benefitsImprove decision making and enhance organizational learningMarket/Industry benefitsExploit economic value of information by adding value to products and services

Category VI: ContentOrganizational benefitsEnhance collaboration of individuals and teamsMarket/Industry benefitsEstablish position at center of electronic market

Sample metricsSavingsReduce paper and communication costReduce headcountReduce transaction and communication costReduce inventory costSpeedReduce cycle timeDecrease wasteRdeuce process errorsIncrease satisfaction and retentionCustomers, suppliers, partners, employees

The learning environmentAssimilating Emerging Technologies

Phases in assimilating emerging technologies1.Technology identification and investment2.Technological learning and adaptation3.Rationalization and management control4.Maturity / widespread technology transfer

Four Phase ICT Assimilation SuccessSuccessSuccessstagnationblock Astagnationblock Bstagnationblock Cnarrowlyfocused andnot marketedtoo efficiencydominatedPhase 1Phase 2Phase 3Phase 4decision to invest+ project initiationtechnology learningand adaptationrationalization andmanagement controlwidespreadtechnology transferLack ofAttentionAndcommitment

Phase 1: Technology IdentificationInitiated by decision to invest in ICT one or more complementary project developmentslack of precision in cost estimation and ultimate stream of benefitseach step characterized by much uncertaintyreasons for failurevendor failurediscovery that technology is inappropriate to the firmpoor user involvementlack of management attentionbad choicefault only discovered after 1 or 2 yearsresult:not clear technical disaster , but unwillingness to invest moreperceived as adding more work to the organizationsignificant cost overruns

Phase 2: Technology Learning and Adaptationinvolves learning to adapt new technology to particular tasks beyond those identified in the initial proposal often quite different benefits than those anticipatedprojects still highly uncertain in their cost and benefitstypical example are knowledge systems or CAD/CAMinsufficient understanding of possibilities leads to stagnation and competitive disadvantagesmanagement in adaptive manner permits management to capture , develop, and refine new understanding of IT

Phase 3: Rationalization/Management ControlChange in organizations approach to the technologycontinued evolution to ones originally not considereddevelopment of precise controls for guiding the design and implementation of IT systems various aspects of project life cycle are analyzedrole of IT staff and users becoming clearerresults becoming more predictablefailure if excessive controls are developedcontrols can be so onerous that profitable expansion of the use of IT is inhibited and prevents logical growth (p379)

Phase 4:Maturity/Widespread Technology TransferProgram of technical diffusionexpand experience gained in one operating division

A firm is confronted over time with a series of waves of technologies

assimilation of several technologies in different phases

To enable and encourage unprogrammed or inno- vative activity , it is recommended that organiza- tions make special and separate provisions for it.Special units for innovative purposes

Emerging Technology GroupOften initially in IT at level of operations and applicationsDifference between leading and lagging companies is the early creation of the ET groupSometimes put outside IT , to help ensure that it is not swamped by the IT control philosophyCharacteristics of effective management of ET groups by phase

Innovative Phaseatmosphere in ET group : exploratory, experimentalorganizational structure and management controls must be loose and informalcost accounting and reporting : flexibleno requirements for cost-benefit analysisleadership : participatingtemporary relaxation of performance standardsET independent unit due to growth in information centersET responsible for intra-organizational technology transfer

Merging the Islands of ITThree IslandsOffice supportdata processingtelecommunicationsIntegration required for several reasons1. all three areas require large capital investmentlarge protracted projects with complex implementationextensive user trainingmore and more supplied by one single vendor2. key sectors of all three islands physically linked in a network3. dominant suppliers market products as base for co-ordinated automation of three islands

Reasons for mergingdecisions in each island involve large budgets and complex technical and cost evaluations , whereby similar staff backgrounds are needed to do the analysisgreat similarities exist in type of management skills and staff needed to do the implementationmost applications require integrated technological networks to handle computing , telecommunications and office support

IT Resource ManagementManagementcontrol

Technology

Data

IT-professionals

End users

Information agelearningefficiency, effectivity

global reliabilitymix of specialized and off-the-shelf

information sharinghigh capacity networksmix of professional resources

high level of commitment and literacy

Centralized Decentralized DistributedPressureEntrepreneurialuser responsivenesslocal reliability

efficient use of low scalelow cost equipmentlocal datafit with field needsdata locally relevant

generalized expertiseinterfunctional career

technical sophisticatedIT motivated HierarchicalStandardizationReliability, security

use of resourcesspecialized equipment, skillscommon datasecurity controldata standards

specialized staffturnover disruptioncareer paths

low technical skillsno IT motivation

Conclusions on Architectural AlternativesMerge technologies and distribute hardware and data must be managed carefully in combinationperiodic re-examination is neededestablish a permanent corporate policy groupuniformity in management practice should not be pushed too farrespect differences in international activitiesaddress the issues in a broad strategic fashioncorporate organization structurecurrent operating administrative processescorporate strategy and directionavailability of human resourcesensure adequate innovation-phase investment in experimentsensure proven expertise is distributedensure balance between long-term and short-term needs

CEO promoting EIS left company.Project only picked up again after 3 years Company significantly behind state-of-the-art